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Monday, 09 May 16
DRY BULK SHIPPING TO WITNESS STEADY PROGRESS MOVING FORWARD ON THE BACK OF GROWING TRADE VOLUMES - BIMCO
 In its latest short-term analysis of the shipping markets, BIMCO reiterated its optimism on the prospects of the dry bulk market moving forward. According to BIMCO, transported volumes are expected to grow slowly – as they seasonally do – from the first quarter into the second. This ought to underpin the freight market.
“Notably, we expect a new record volume of combined grain and soybean exports this year from Argentina and Brazil. We do not anticipate a massive rise in freight rates for handysize, supramax and panamaxes on the back of this, as ships are already waiting around the main loading areas. Nevertheless, it should give a boost in confidence, a confidence that Moore Stephens in March assessed to be at a record low”, said BIMCO’s report.
Another positive indication of China not being as vulnerable as some may believe, which is supporting the soft landing trajectory, is the improving domestic steel prices, seen since mid-February. In the international markets, spot iron ore prices have also rebounded from USD 41 per MT at the beginning of 2016 to see USD 56 per MT in mid-April. Very different from the peaks of the past, but a positive indicator in the midst of all this surrounding uncertainty.
“We are still worried about the sustainability of freight rates in the years to come. Our main worry is that demolition activity will slow down as the BDI improves. If shipowners slow demolition of ships considerably, the fleet will keep growing. This will widen the fundamental imbalance further because we forecast the demand side to grow slowly in the coming years. In order to reverse several years of adding capacity in excess of demand growth, we need to develop a multi-year trend of negative fleet growth. BIMCO assess the current utilisation rate of the dry bulk fleet at the low end of the 70s”, said the report.
Looking further ahead, BIMCO noted that “coal imports into India may change. If the retained political vision of making India self-sufficient in thermal coal becomes reality. Surely the jury is still out on that. In November 2013 the then Indian Power Minister Goyal was “very confident”, when saying India may stop thermal coal imports in two to three years, as domestic production would increase. Mr. Goyal, now being India’s Energy Minister repeated the exactly the same words in April 2016. “We want to completely stop its import over the next two to three years”. India imported 171 million tonnes of thermal coal in 2015, slightly down from 176 million tonnes in 2014. SSY expects India to import 170 million tonnes of thermal coal in 2016”, it noted.
Supply
Meanwhile, “despite a record high volume of demolished dry bulk shipping capacity in the first three months of 2016, the total dry bulk fleet still grew. 16.7 million DWT of new capacity entered the fleet while 14 million DWT was sold for scrap. All in line with BIMCO’s forecast.
Not all of the dry bulk sub-segments saw an increase in fleet size. The capesize fleet, for instance, which has doubled over the past 6½ years, reduced in number (7 ships less) as well as capacity (-0.2%) in Q1-2016. For the full year, BIMCO holds unchanged expectations for deliveries and demolitions, which means we expect the fleet to grow by 1.1% or 10 million DWT in 2016. What has changed though from our January report is the slippage rate of deliveries, now at 50% up from 40%. Owners and investors are working hard to delay the delivery of new ships into a miserable freight market”, said the report.
According to BIMCO’s Chief Shipping Analyst, Mr. Peter Sand, “as deliveries offer traces of past optimism, most interestingly the appetite for signing new contracts for dry bulk ships at the world’s shipyards has ceased. Until the middle of March, only four new contracts had been signed, three at Japanese shipyards and one in China. During March and April, the long anticipated orders for 30 VLOCs with a capacity of 400,000 DWT each are now confirmed. Lifelong time charter contracts (27-years) appears to have been awarded to all of them already. This is the latest development that ties China and Vale closer to each other again, after their fallout following the disputes over the original batch of valemax VLOCs which were not allowed to call at Chinese ports for several years”.
He added that “without doubt this is bad news for international owners and operators. Each VLOC can carry an estimated 1.6m tons of iron ore from Tubarao, Brazil to Baoshan, China per annum. This new batch of VLOCs, will remove 48 million tons of iron ore from the “open market”. As the current fleet of 34 VLOCs (2011-2015) already carries a total of 54.4m tons of cargo, the best front-haul leg in dry bulk shipping is crippled even further by this industrialisation of trade. In 2015, Brazil exported 191.6 million tons of iron ore to China; the existing and new valemax between them will be able to carry over half Brazil’s current annual iron ore exports. The 30 new VLOCs are due for delivery in 2018-2019”.
Demand
In terms of demand, BIMCO said that “on 10 February 2016, the Baltic Dry Index (BDI) hit 290. At that point, a bulk carrier regardless of its size, age and fuel-efficient qualities earned a time charter average of USD 2,417-2,776 per day. Whereas the three smaller segments have seen higher earnings since then, Capesize earnings lost ground up until the end of March. By mid-April, the gap closed and capesizes are back on par with the pack. Despite the fact that earnings have doubled in those two months, they remain below OPEX levels for the largest part of the fleet. Despite the many attempts by steel mills around the world to fend off Chinese steel from their home market, China’s steel export volumes did not fall significantly in January and February. Export dropped by just 1.6% to 17.85 million tonnes. New data for March showed exports of 10 million tonnes. In 2015, China flooded the world market as 112 million tons were exported, bringing down scrap steel prices in the wake of it.”
It added that “global crude steel production for January and February combined was 5.6% lower than in the same period of 2015, according to Worldsteel. Crude steel production in China was down 6.5% at the same time. The three key items to watch out for in 2016 are Chinese imports of coal and iron ore, as well as how much dry bulk tonnage is going to be demolished. Nothing else really matters to an extent that can either improve or damage the fundamentals of the dry bulk shipping market. In the midst of doom, gloom and uncertainty for shipbuilding, China’s combined imports of the two key commodities in the first two months fared better than we thought. The trouble is, however, that it did not bring decisive support to the freight market. Chinese iron ore imports grew by 6.4% to 155.8 million tonnes over the first two months versus this time a year ago. While coal imports to China fell by 10% to 28.8 million tonnes over the same period. New data for March … all positive. Chinese iron ore imports were 85.8 million tonnes, while coal imports rose to 19.7 million tonnes. The strong coal imports over March all but levelled out the drop in January and February. Q1 coal import growth was down by 1.2% year on year”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 11 May 16
MARKET INSIGHT - KATERINA RESTIS
On Saturday 7th May, Riyadh replaced the long-serving oil minister of more than two decades, Ali-Al-Naimi, as part of a major government overhaul, ...
Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the ...
Monday, 09 May 16
INDONESIAN CS COAL INDICES UP CONTINUES; POSITIVE DIRECTION
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.10 percent week over week to averaging $38.82 per ton on this past Wednesday, a ...
Monday, 09 May 16
BALTIC DRY INDEX ENDS WEEK ON A NEGATIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
Friday, 06 May 16
U.S. WEEKLY COAL PRODUCTION UP 9 PERCENT W/W; DOWN 35.3 PERCENT Y/Y - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.3 million short to ...
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- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
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- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
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- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
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- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
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- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
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